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Thursday, May 3, 2012

[ODDITIES] Game Prices Haven't Gone Up, They've Gone Down!

I'm strolling through Kotaku, making my rounds on RSS stories I've bookmarked, and I get to this story claiming that - again - used games are killing developers and are prohibiting freedom for fresh ideas (read: new IPs). One Crytek developer was quoted with "It's weird that [second-hand] is still allowed because it doesn't work like that in any other software industries, so it would be great if they could somehow fix that issue as well."

I'm sorry, what? You think that second-hand is ludicrous? Is it a crime to sell off your old crap you don't want anymore? What about borrowing? I'm sure that's not frowned upon, considering we all did it as kids. And making that connection with "other software industries" is completely moot. "Other software industries" would be what in your eye? Operating systems? Photoshop? ACID? Those are programs, not means of entertainment; these programs require licenses. Video games are exactly that: games. Did I have to sign a "do not resell" waiver when my parents bought board games back in the 90's? What about movies? There's nothing wrong with reselling used movies. CDs? HA! Don't get me started.

Throughout the comments on Kotaku, one caught my eye by Trasken, saying "there wouldn't be so many used games if prices weren't jacked up so high and if more quality games were released". He had a few replies, so I had to check it out, as that comment - poorly worded, and not pre-prepared to defend itself - had some replies. This guy, Odin, caught my attention: "What's funny is the price of games has actually gone down over the years. I have no idea why people seem to think they've gone up", then linked to this 1UP story back in March, detailing price of games adjusted for inflation, making the argument the other way around: game prices have gone down.

Now, that got some gears turning, and I had it set that I'd reply to him, but it got so lengthy, I said "fuck it" and decided to bring it here:

"Back in the 90's, there was no set price for games. I remember walking into an EB Games and seeing brand new copies of N64 games as high as $75.

Last generation, games dropped to $50 flat, and this generation, game prices went up to $60, while their PC counterparts remain the same $50 (with a few exceptions in the past few months).

Face value has gone up. There isn't an "adjusted for inflation" price tag on games at stores, and people don't adjust for inflation when they pay for groceries or their bills; "hey honey, let's see how much we would have been spending 10 years ago!".

Games back in the 90's were expensive because the console manufactures hadn't set prices like they are doing now. Look at inflation the other way: the value of the USD has dropped considerably (something we already know). Using the same inflation calculator 1UP used, $50 in 2012 has the same buying power of $30 in 1992, the year they used for their chart.

Cost of developing games - Up

Face value of games - Down

Value of the Dollar - Down

I'm pretty sure you can make a blockbuster game using far less than what they are budgeting themselves for. Rather than the argument being "lower all the prices!" it should be "price your game accordingly". I've made this argument before, and I'm saying it again: your Call of Duty, Halo or Gears of War can get by with a $60 price tag (even though they make up what they spent on the game within 5 hours of release and then some), however, other games can't survive that price.

Working retail, I've seen games abandoned on the shelves because of their high price tag. Hell, DNF (Gearbox; 172 employees) dropped from $60 to $40 within a few months, then to $30, then $20, now, it's $15 regularly, on sale for $5 at Best Buy (where I work). Another example would be Catherine (Deep Silver/Koch Media; 300+ employees, unsure how many are game developers). We had ~8 copies come in on release. We sold 2 the first day, 1 or 2 over the next few months, and now, 3 copies are left on the shelf at the still-high-price-for-that-game $60, and it's never gone on sale. Shadows of the Damned (Grasshopper MFR; 140 employees) was an incredibly slow seller, despite the pedigree behind it. Once it dropped to $40, it started to sell. $30 came, and the Xbox 360 version sold out, while 3 remain for PS3.

Developers/publishers need to reevaluate how they budget themselves for games. Just because Suda 51 is teaming up with Shinji Mikami to make a horror-shooter doesn't mean it's going to appeal to the masses (selling 24k in the first month attests to this; read this Eurogamer story). Just because you're slapping a fresh coat of paint on a pile of shit (DNF) doesn't mean it's going to sell like crazy. Just because the other games out there are priced at $60 doesn't mean yours needs to be, as well. Budget smart and price accordingly; you'll see better sales, revenue will be at a steady incline, and your margin goal will be more attainable."